09 Jul Locking bias
Yesterday’s drop in the US stock market was initiated by panic over China’s stock markets crashing. Well, it’s amazing how quickly things can change…. This morning, the US stock market is climbing higher after a sizable recovery in China’s stock market. What initially helped to improve mortgage interest rates yesterday is now driving mortgage rates higher. The level of volatility with mortgage rates continues to be abnormally high, making the decision of when to lock an interest rate very difficult. With the economic collapse in Greece still an ongoing concern, we anticipate that there will be more volatility as a result.
Yesterday was a strange day around the world, with the USA experiencing some very peculiar events. For example:
1 – The New York Stock Exchange was close due to a “technical issue”
2 – United Airline flights were grounded after computer systems failed
3 – The Wall Street Journal website was down
4 – Power was lost in Washington DC
5 – The NY subway system stranded thousands of people in terminals due to unknown shutdowns of computers
Although they could be coincidental, rumors are circulating that this was a planned attack by the hacking group known as “Anonymous.” If the rumors are true, that shows the level of power they have and could be a sign of more serious situations ahead. However, the stock market doesn’t appear to be concerned in the slightest…
As we have been saying for days, the risk of floating is extraordinarily high. We will maintain our locking bias.